Water & Wastewater Treatment

WWT June 2016

Water & Wastewater Treatment Magazine

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10 | JUNE 2016 | WWT | www.wwtonline.co.uk Events Procurement model 'blocks true water sector collaboration' E arly collaboration across the supply chain is key for better construction projects in the water sector, but the traditional procurement model oen prevents this collaboration from taking place early enough, delegates at WWT's Asset Management conference heard. Speaking at the conference in Birmingham on April 28th, Dale Evans, Director of Anglian Water's @One infrastructure Alliance, pointed out that less than half of large UK construction projects are delivered to time and cost. Becoming more collaborative at an early stage is an important part of improving this, he suggested. He said that the best examples of construction projects, such as the building of the Velodrome for the London 2012 Olympics, use "integrated teams" which collaborate from the start, sharing ideas and issues widely at an early stage before becoming more focused as the project progresses. By contrast, many projects in the water sector start off with a narrow, hierarchical focus and only become more collaborative later on when problems develop, creating unforeseen delays and cost overruns. But moving to early collaboration may require rethinking the procurement model, he told delegates. "We have relied on a cost-based approach to procurement, and because we procure that way, we try to split our complicated programmes into individual projects, and the approach to the supply chain is all about transferring risk rather than sharing risk," said Evans. "If we want to be more collaborative, the traditional procurement model is completely unfit for purpose. There should be an emphasis on behaviour, value, capability and culture rather than just cost." Later at the conference, John Bentley, General Manager of Asset Creation at Severn Trent, said that the transition to a Total Expenditure (Totex) approach calls for a true business transformation programme, which involves cultural change as well as changes to structures and processes. This transformation has to involve more than just switching emphasis from Capex to Opex. "Totex is a business change programme, but many people don't see it that way, which is a problem," said Bentley. "I'm convinced that Totex does work and that it is the right way to go. But as in any change programme, you need to think more about the people involved and how you manage that change with them, because they are the people who need to deliver it." THE SPEAKERS "Totex is a business change programme, but many people don't see it that way, which is a problem." John Bentley General Manager Asset Creation, Severn Trent "If we want to be more collaborative, the traditional procurement model is completely unfit for purpose." Dale Evans Director of @One alliance Anglian Water "Sludge used to be seen as something to get rid of… now we are moving towards a world where it is a valuable commodity." Clive Norfolk, Strategy and Business Planning Manager, Thames Water James Brockett reports from Birmingham To take away 1. With multiple ODIs to tackle in this AMP period, water companies must have strong internal governance processes to ensure that asset decisions are made that strike the right balance between them. 2. A total expenditure (Totex) approach is widely acknowledged as beneficial for water asset management, but silo working and other cultural factors and hindering its progress. 3. Collaboration with the supply chain needs to start as early as possible in a project's life for it to have the best effect. 4. The commonly used procurement model based on cost may have to change if the transition to Totex and collaboration is to be successful. 5. Catchment management and other non-asset solutions need more regulatory support if they are to succeed on a larger scale than currently. "Engaging stakeholders on catchment projects is easier when you work with the third sector… we are still seen as the 'big, bad water company' so it helps to have a trusted ally." Jo Harrison Asset Management Director United Utilities NEXT EVENT Water Industry Energy conference, Jun 22, Birmingham. wwt-energy.net

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